The Morning Download: Lessons From the Russian Power Systems Hack

The federally owned Bonneville Power Administration says it doesn’t believe the utility was breached, though it appears to have received suspicious emails. PHOTO: NATALIE BEHRING/GETTY IMAGES
Photo:
Natalie Behring/Getty Images

Good day, CIOs. The Wall Street Journal's Rebecca Smith and Rob Barry reconstruct the worst known hack into the U.S. power system. The Russian effort "went after the system’s unprotected underbelly"—contractors and subcontractors--rather than the big utilities. "From these tiny footholds, the hackers worked their way up the supply chain," they write.

A familiar story but worth repeating. CIOs and CISOs are now on the front lines of security, matched up against one of the most powerful nation states on the planet. No one can do it alone. The private sector needs to understand its role in securing its own network and think in bigger terms. It’s significant that "some companies were unaware they had been compromised until government investigators came calling, and others didn’t know they had been targeted until contacted by the Journal."

A national security policy. Just as the private sector needs to be mindful of smaller companies in the supply chain, larger companies must be mindful that they are part of a larger supply chain, one that includes the U.S. Piecemeal approaches to cybersecurity are not enough. There needs to be greater purpose and collaboration between the public and private spheres and between the U.S. and sovereign states committed to the rule of law.

CHINA TECH

Huawei tech trapped in the Valley. The Chinese telecommunications giant has been unable to send home certain technologies from its Silicon Valley research-and-development unit, Futurewei Technologies Inc., after the Commerce Department, citing national security concerns on the export of certain technologies, signaled it wouldn’t renew a Futurewei export license. The Journal's Dan Strumpf and Kate O’Keeffe have more.

Why Huawei? Huawei has been effectively blocked from selling its telecommunications equipment in the U.S. since a 2012 Congressional report labeled it a national security threat.

Meanwhile. The WSJ's Drew Hinshaw reports that a Chinese Huawei executive has been charged with espionage in Poland. The individual wasn’t named, but was identified as a graduate of one of China’s top intelligence schools.

Digital 'Belt and Road' to digital iron curtain? As part of its massive infrastructure effort worldwide,China not only is exporting its technology, but its "norms for how technology should govern society," Adrian Shahbaz, author of a report on digital authoritarianism, tells Bloomberg Businessweek.

That's a lot of cameras. In tiny Mauritius, off Africa’s east coast, opposition politicians are weary of a Huawei effort to install 4,000 cameras.

Twitter crackdown. China is cracking down on citizens using Twitter, the New York Times reports. Twitter already is blocked in the country, but users have been able to access the social media service via special software.

MORE TECHNOLOGY NEWS

Apple’s challenge: Build its services business. Slowing iPhone sales are heightening the pressure on Apple Inc.'s non-hardware business, the WSJ's Tripp Mickle reports. Sales in the division hit $10.8 billion for the quarter ended in December, but future growth is imperiled by a number of obstables, from slowing App Store sales to moves by companies like Netflix Inc. and Fortnite creator Epic Games Inc. to avoid the App Store completely.

Time to get outside. WSJ Columnist Christopher Mims says that if Apple wants to see its software and services businesses grow, it needs to look beyond its walled garden. "Opening up may not merely be a means of maintaining Apple’s growth but ultimately its survival."

Oracle plays ball. The software company will pay more than $200 million for 20 years for naming rights to the San Francisco Giants' stadium, Bloomberg reports.

WHAT YOUR CEO IS READING

Every week, CIO Journal offers a glimpse into the mind of the CEO, whose view of technology is shaped by stories in management journals, general interest magazines and, of course, in-flight publications

El Chapo’s IT guy. Imagine being the IT guy for Joaquin Guzmán, aka El Chapo. This week the IT specialist, Christian Rodriguez, was the center of attention at the Federal District Court in Brooklyn as prosecutors detailed how he provided the FBI with encryption keys to a communication system he designed for the Mexican drug king. The digital calls captured by the FBI might be “the most damaging evidence introduced so far,” in El Chapo's trial, NYT’s Alan Feuer reports. Mr. Rodriguez likely will not be responding to cartel requests for new toner cartridges.

Eating the dog food. Several former and current Facebook Inc. employees describe to CNBC's Salvadore Rodriguez their frustration with working at the tech giant. One major source of friction, they say, is a peer review system that leads employees to post on their profiles "any report on the benefits of working at the company," even if they are unhappy. Sounds like a typical social media experience.

Blockchain reconsidered. When McKinsey & Co.'s latest blockchain report leads by noting that the technology "has yet to become the game-changer," the reader can almost hear the heavy sigh of defeat. More troublesome words and phrases follow: "perceived potential" (ouch); "stuttering blockchain development path" (yeesh); "stuck at stage 1" (oh my); "future looked bright" (egad) and "billions and billions of dollars had been sunk" (it's over). The revolution may not be blockchain-ized, but McKinsey thinks the technology can work if executives drop the hype and apply the basics: "start with a problem" to be solved; make a "clear business case and target ROI" and "commit to a path to adoption."

EVERYTHING ELSE YOU NEED TO KNOW

White House officials are divided over whether President Trump should declare a national emergency to obtain funding to build a border wall and end a partial government shutdown. (WSJ)

The strong U.S. economy wasn’t enough to give many mall-based retailers a strong year-end boost, as Macy’s and others posted tepid holiday sales, fueling a selloff in retail stocks. (WSJ)

Michael Cohen, President Trump’s former personal lawyer, will testify publicly before the House Oversight Committee on Feb. 7. (WSJ)

Republican officials in Texas on Thursday night voted down an effort to oust a local party leader because he is Muslim. (WSJ)